Nicaragua No. 2 in renewable energy investment climate

By:Tim Rogers/ Nicaragua Dispatch | June 19, 2012

(posted June 19, 8:25 a.m.)- Nicaragua is one of the most attractive countries in Latin America and the Caribbean to invest in renewable energy, according to a report released yesterday at the Río+20 UN Conference on Sustainable Development in Brazil.

According to “Climatescope 2012,” a new report by the Multilateral Investment Fund and Bloomberg New Energy Finance, Nicaragua ranks No. 2 among 26 countries in the hemisphere, second only to Brazil.

The report, which uses 30 indicators to measure each country’s ability to attract investment for renewable energy and build a greener economy, found that Nicaragua performed well in areas of clean energy policies, power sector structure, total clean energy investments, and availability of green microfinance.

“From 2006 to 2010, Nicaragua attracted approximately $1.1 billion in clean energy investment for its geothermal (50%), wind (34%), small hydro (10%) and biofuels (6%) sectors,” Climatescope found. “Last year alone, about $117 million and $95 million went into financing new geothermal and wind projects, respectively.”

The report says that biomass is currently “Nicaragua’s flagship clean energy sector.” However, it notes that geothermal energy is now attracting the most interest from investors seeking to “explore Nicaragua’s promising but relatively untapped sub-surface power generation potential.”

“It is the favorable geothermal potential which positions the country well to develop more clean energy capacity in coming years,” the report reads. “Since 2009, this promising sector has been taking the lion’s share of total clean energy investment, reaching a cumulative total of $563 million in 2011.”

Climatescope found that Nicaragua’s power sector reforms have also been “somewhat successful” in opening opportunities for the private sector in generation and distribution. The report notes that the country’s energy market regulatory framework aims to displace some 700 megawatts of oil and diesel power capacity in the coming years.

The report noted that the government and development finance institutions—the Central American Bank for Economic Integration (CABEI), the Inter-American Development Bank (IDB), and the Multilateral Investment Fund (MIF)—have “played a key role in funding clean energy development in Nicaragua.”

The same is true on the micro-finance level, where investments are based more on social considerations.

“Nicaragua is the most robust green microfinance market of the Latin America and Caribbean region, with 10 organizations offering some kind of green financial product,” the report reads. “The majority of borrowers are either low income rural citizens or rural micro, small and medium enterprises.”

Despite the challenges ahead—70% of Nicaragua’s total 1,073 megawatts of installed power capacity is still derived dirty and expensive fossil fuels—the Climatescope report says the country is heading in the right direction, ratifying the Sandinista government’s claim to a renewable energy revolution in Nicaragua.

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In recent stories in The Nicaragua Dispatch, Nicaragua has been described as a "renewable energy paradise" and as "ranking third in the Latin America renewables market." But neither story mentions what has become Nicaragua’s forgotten resource: solar energy.

What good news! And very positive public visibility for Nicaragua… wonderful! Thank you for writing this article, Tim. I wonder if in the future you might research an article for the environmental and socio-economic effects of the biofuels industry and the construction of geothermal plants? These renewable energy sources have other costs if not pursued thoughtfully, with certain values in mind. Thank you again Tim for another interesting feature article about NIC! Muchos saludos de New Hampshire.

Rachel

What good news! And very positive public visibility for Nicaragua… wonderful! Thank you for writing this article, Tim. I wonder if in the future you might research an article about the environmental and socio-economic effects of the biofuels industry and the construction of geothermal plants? These renewable energy sources have other costs if not pursued thoughtfully, with certain values in mind. Thank you again Tim for another interesting feature article about NIC! Muchos saludos de New Hampshire.

Gerd Schnepel

The list mentions biofuel. That does not belong to clean energy. It causes more harm (say the European scientists) than petrol, it contaminates Niaraguan water resources and their “own” plantation workers, it causes more rural exodus and poverty, it destroys biodiversity and tourism development. So, why call it green and clean? It is just green bucks for the mostly foreign investors, who do not care about Nicaragua’s environment and rural population (see Kukra Hill and Río Escondido: just environmental delinquency on big scale, without any legal consequences for the Tico, Dutch, Nica etc. criminals).

de Las Sombras

Renewable does not always = clean energy or environmentally friendly energy. Case in point are the growing number of wind turbines spreading across what I call the “Rivas Bottleneck”.

3 of the 4 North American migratory bird corridors (known as the Mississippi, Central and Pacific Flyways) bottleneck through the pacific coast of Nicaragua …. and it is not only the wind turbines themselves but the associated transmission lines, draining of wetlands and habitats that can kill birds and disrupt the resting/breeding areas and migratory paths of more than 100 species of just North American birds the migrate through the corridors to Central America… and that’s not including the numbers of species that migrate down to or up from South America nor that that seasonally shift within the tropics/Central America!

Wind Turbine generated energy can and should have a valuable place in our developing renewable energy program… but unless they are sited with forethought and attention to the localized wildlife and ecosystems they impact the potential for long-term environmental damage can be hugely disproportionate to their supposed ‘benefits’.

Adevarul

Ah, another cut and paste argument from the Audubon Society. The “supposed benefits?” That sounds really open minded. I guess burning coal and importing oil to burn somehow has more appeal. There are in fact turbines in the Rivas. Please cite the information from contacting them about bird kills. Also state how many birds are killed by cats, cars, trucks, electric lines & other obstacles, storms, starvation, exhaustion , etc on their migratory path. Global wind developers are spending hundreds of millions in select countries where utilities and consumers welcome them – because wind is cheaper to install per MW than solar or bio fuel. They are already fully engaged in minimizing environmental impacts that are often overstated by those opposing wind power.

How about posting the specific number & type of bird kills confirmed from the turbines in the Rivas, the number and type of bird kills from all other sources, the TOTAL cost of wind energy and the TOTAL cost of fossil fuel that consumers in Nicaragua are paying?

Interested in why solar energy is not listed above, please advise me, as I have had problems understanding why “net metering” is not offered as an incentive for generating clean solar energy like most other alternative energy conscious countries? Without it it does not make economic sense/cents to produce excess clean solar energy and “grid tie” and add to the grid. As it stands you have to pay more than triple to get your own generated excess energy back to use at night.
Any ideas on how to change this abnormality and get fair regulations in place, so Nicaragua can truly be in the forefront of green/alternative energy, let me know. @ dave@playaroca.com

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Editorial
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As Sandinista faithful mobilize in the streets of Managua to pay homage to former Venezuelan President Hugo Chávez on the one-year anniversary of his death, Nicaraguan and Venezuelan analysts predict the international project he started won’t outlive its founder for much longer. President Daniel Ortega, who is traveling to Venezuela to pay official tribute to his former benefactor, honored Chávez as a revolutionary who “fought for the people, fought for America, fought for humanity, fought for peace and fought for justice.”
Prior to leaving for the airport today, Ortega said that now, “more than ever,” the countries belonging to the alliance created by Chávez will “continue to fight for peace, for justice, for liberty and for the sovereignty of our people.”
But just a year after the loss of Chávez’s charismatic leadership, and amid the ruin of Venezuela’s economy, the Bolivarian Alliance for Our Americas (ALBA) —Chávez’s brainchild for regional integration — appears to be collapsing under the weight of its own ambition.